Fed risks Trump's fury over rate increases

Irving Hamilton
October 19, 2018

But, amid brisk American expansion, some Fed policymakers also warned of looming dangers to the world economy, such as the potential for a strengthening U.S. dollar and possible contagion from sputtering emerging markets, according to minutes from the Fed's most recent meeting three weeks ago.

The discussion, revealed in minutes of the September 25-26 meeting released Wednesday, shows that a few participants believed that the Fed's key interest rate would need to "become modestly restrictive for a time" to guard against inflation climbing too high.

The U.S. economy has been growing more quickly this year than many economists believe is possible without generating higher inflation, with the jobless rate at its lowest level in decades.

"My biggest threat is the Fed", he said, according to excerpts released before the interview with "Trish Regan Primetime" airs.

Mike Loewengart, vice president of investment strategy at E*Trade, said: "For now, the Fed has made it clear that they are focused on their agenda despite rising presidential pressure on their rate decisions".

Fed Chairman Jerome Powell has said the central bank will monitor interest rates to avoid raising them too quickly, which could hamper USA growth. "I'm not happy with what he's doing because it's going too fast", Trump said.

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Used to the often empty words of politicians, farmers in the crowd said they could tell Prince Harry's speech came from the heart. On Twitter , the Governor wrote: "Farewelling Their Royal Highnesses The Duke and Duchess of Sussex from Victoria".

The Fed has raised interest rates three times this year as it seeks to prevent a vibrant economy from overheating.

Furthermore, "some" at the meeting said that risks grew as the United States economy increasingly outpaces its rivals' more sluggish growth "because of the potential for further strengthening of the dollar". Traders of futures contracts tied to the Fed's policy rate see rates topping out at about 3 percent.

The minutes showed that officials were generally pleased with how the economy is unfolding this year, with strong job growth and inflation hovering near the Fed's 2 percent goal.

Trump's criticism intensified after last week's big stock market tumble, which has been partially reversed this week.

Republican U.S. Representative Jeb Hensarling, who is set to retire as chairman of the House of Representatives Financial Services Committee that oversees the central bank, said Trump "clearly has his own style". Trump denied having direct contact with Powell since nominating him.

Under the law that established the Fed, a president can remove a board member "for cause".

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